The economic impact of COVID-19 is felt on the personal finance of people across the world who are looking for ways to tide over the situation. In Kenya, people are lapping the short-term credit in the form of digital loans by mobile money operators. The number of people taking digital loans has doubled during the COVId-19 induced lockdown period.
Boston Consulting Group's Consumer Sentiments Survey conducted in April and May 2020 reported that "In May, 29 percent responded that they had taken out a short-term loan, compared to 16 percent in April. Mobile money operators were the most common sources of this credit”
Kenya is a pioneer in using mobile money transfer services as the key tool for providing financial inclusion to its citizens. A simple money transfer service, M-PESA launched in 2007 has transformed the financial service industry in Kenya. Today mobile money operators are providing multiple services like digital loans, marketplace for small businesses and farmers.
Digital loans are easy to process and disbursed but there are concerns of shaming the defaulters and compromising the data security of clients. The Digital Lenders Association of Kenya (DLAK)which is a body representing the digital lenders of Kenya has distanced from two of their members, Okash and Opesa over unethical practices. These mobile apps have shared the details of defaulting customers with the moneylenders and asking them to recover the money.
DLAK also stated that Opesa and Okash are known for attacking a client's data privacy which is against the Kenyan data protection laws and has additionally spoiled the reputation of digital leaders in Kenya.
In April 2020, Central Bank of Kenya barred unregulated digital mobile lenders from forwarding the names of loan defaulters to credit reference bureaus. A huge number of Kenyans have been recorded on Credit Reference Bureaus by digital money lenders for loans as little as $5.
Central Bank of Kenya governor Patrick Njoroge told during a press conference in May 2020 that the central bank in consultation with the mobile money operators and digital lenders is presently working to develop a model where the borrowers are protected from mistreatment of online moneylenders.
The borrowers are looking up to the regulatory authorities and the industry bodies to come up with a mechanism which will protect their interest in times of such a health and economic emergency.
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Catalonian Secessionist Movement in Spain: The Genesis and Present Status
Catalonia with its capital in Barcelona, is one of the wealthiest and historically significant regions of Spain. The region is home to around 7.5 million people and has its own official language, parliament, flag, and anthem.
The region was granted considerable autonomy by the 1978 constitution of Spain. The legislature of the autonomous Catalan region passed Statute of Autonomy which was approved by the national parliament and ratified by the Catalan electorates in a referendum in 2006.
On 1st October, 2017, a referendum was organized in Catalonia for independence despite opposition from the central government of Spain. Owing to the resistance from Madrid, the voter turnout was just a lowly 43%. However, the Yes option won by a massive 90% margin.
Under a tense environment, the separatist majority in the Catalan parliament announced independence on 27th October, 2017. However, Madrid reacted strongly to the move by dissolving the Catalan parliament under Article 155 emergency powers and initiated a violent crackdown on the protesters and separatist leaders in the region. Nearly three years since the referendum, Catalan leaders remain in jail or in exile. The entire crisis has been termed as Spain’s biggest political-crisis since 1975, when democracy was restored post General Franco, the military dictator’s death.
Catalonia as a region enjoyed a high level of autonomy before General Francisco Franco led Nationalist forces overthrew the Spanish democratic republic in 1936. Overthrow of Spanish democratic republic resulted in a three year long Spanish Civil War which raged from 1936 to 1939. In 1938 when the country was going through a phase of overhyped nationalist sentiments during the civil war, General Franco abolished the region's autonomy. General Franco ruled Spain as a dictator from 1936 till he died in 1975. After his death, Spanish democracy and Catalonian autonomy were restored once again.
There were calls for independence of Catalonia from fringe elements from time to time, but it was not supported by the mainstream political or social organisations. However this changed when Spain’s Constitutional Court issued a landmark ruling In 2010 and declared some of the articles of the 2006 Statute of Autonomy as unconstitutional.
There were massive protests in Catalonia against the Supreme court ruling, specially against the provision which place the distinctive Catalan language above Spanish in the region and ruling that “The interpretation of the references to ‘Catalonia as a nation’ and to ‘the national reality of Catalonia’ in the preamble of the Statute of Autonomy of Catalonia have no legal effect.”
Why do Catalans insist on independence?
Concert for Catalonian Independence | Source: Núria via Flickr
A lot of Catalans believe that Catalonia has a moral, cultural and political right for self-existence and that it has long put Spain’s best economic interests in priority despite not getting enough in return. Many Catalans are also unhappy with the decision of Spanish SC to declare the 2006 Statute of Autonomy as unconstitutional. They argue that it would have given Catalonia greater independence and by annulling it Spain is interfering with the internal affairs of Catalonia.
A timeline of Catalonia’s modern independence movement
Carles Puigdemont, the regional President of Catalonia | Source: Wikimedia
On September 11, 2012, thousands of protesters gathered in Barcelona to show support for the independence movement. Later in November, signaling a major shift in the politics of the region, the majority of the seats were won by pro-independence parties in the Catalan regional parliament.
On November 9, 2014, Catalan authorities held a mock vote for an independence referendum despite a prohibition order from Madrid. The then regional president Artur Mas, along with three other Catalan cabinet members were later fined for disobedience and misuse of public funds.
On June 9, 2017, Carles Puigdemont, the then regional president of Catalonia announced plans for a ‘binding’ independence referendum. Madrid declared the referendum as illegal and Spanish Prime Minister Mariano Rajoy vowed to stop the vote.
On October 1, 2017, the referendum was organized under a tense atmosphere which saw a lowly 43% voter turnout. Reportedly the Civil Guard and National Police forces raided a few polling stations and clashed with the voters even as the Catalan Police mostly stood down. Puigdemont claimed a landslide win for secession in the referendum.
On October 27, 2017, the Catalan parliament declared Catalonia as an independent republic even as no foreign nation recognized the declaration. Spain PM Rajoy immediately invoked constitutional powers to take over Catalonia and fired Puigdemont and his cabinet members.
Ever since Puigdemont fled to Belgium, Spain took control over the region and has sent all the major accomplices of Puigdemont and pro-independence leaders to jail. Most of them have been served with lengthy jail terms for being a part of the controversial independence referendum of October 2017.
Although direct rule was lifted after the formation of the new Catalan government in June 2018, the single biggest winning party was the center-right, pro-unionist Citizens party, which took 37 seats. Three pro-independence parties also secured around 70 seats combined in the 135-seat regional parliament election. Protests for independence have mostly faded away in the region.
What happens next?
The current Catalan regional president, Quim Torra has called for the Catalans to greet guilty verdicts with a ‘huge show of nonviolent civil disobedience’. Spain’s Prime Minister, Pedro Sanchez has been much less brutal compared to his predecessor Rajoy. However, he has maintained that any negotiations will have to be adhered to by the constitution while ruling out the possibility of a referendum.
The political tussle between Puigdemont and his allies who favor pressurizing Madrid with provocative moves, and the Catalan Republic Left which has sought to employ a less confrontational and more practical approach has made the situation quite volatile. However this apparent disunity among the political leadership of Catalonia has resulted in a gradual reduction of public support for the independence movement of Catalonia.
